Nick Pugh
Nick Pugh 9 November 2017

Targeting Shoppers As They Shop

There are many different tools and techniques available for brands to promote themselves in-store. Collectively these are known as shopper marketing. But why does shopper marketing campaigns often deliver a poor return on investment?

There are many different tools and techniques available for brands to promote themselves in-store. Collectively these are known as shopper marketing. Investment in shopper marketing represents up to 25 per cent of many brands’ total marketing spend. The biggest spenders are the fast-moving consumer goods (FMCG) companies.

However, there is relatively little attention paid to the effectiveness of this channel, and this is one reason why it often yields unacceptably low levels of return on investment (ROI). With more opportunities than ever available for brands to target shoppers while they are actually shopping, the purpose of this article is to explain how brands can optimise their shopper marketing mix. It identifies the best ways marketers can secure the optimal promotional strategy in-store, across their portfolio of products, and across different retailers.

Shopper marketing is in-store activation undertaken and funded by brands, on the physical – and now digital – properties of retailers. The purpose of shopper marketing campaigns is to reach shoppers as they shop and trigger behaviour just before the moment of purchase. Shopper marketing aims to persuade consumers to put products into a trolley or click ‘add to basket’.

Shopper marketing tools and techniques are incredibly varied. There’s a lot of space and potential for communication right across the architecture of a supermarket: from car and trolley parks to trolleys and baskets; from signage outside the store to signage inside. This includes signage on the floor, wobbling from the shelf, as flags and banners suspended from the ceiling, in-house magazines, on in-store TV, and by sampling products in person. Shopper marketing has its own jargon, from recipe barkers to side fins, toby boards to aisle arches.

Our best, informed estimates suggest that brands are investing around £500m a year in shopper marketing in the UK alone. Shopper marketing spend – also known as ‘non-price’ – often accounts for around 25 per cent of total marketing spend. Budgets to fund shopper marketing are not, typically, controlled by one function but often sit across brand, sales, and dedicated shopper teams, depending on the scale and organisational structure of the manufacturer.

Despite the significant investment that brands make in shopper marketing, until recently most have invested very little in robust analytics to determine return on this investment. Compared with what marketing and sales invest in understanding the ROI of their media and promotional spend – in-house and in partnership with external measurement experts – shopper marketing has historically been commissioned with only limited scrutiny. Reasons for this include:

• Brands feel that shopper marketing is simply the price of doing business, and supermarket buyers often tell manufacturers that investment is required to support their decision to list and stock the product

• Shopper marketing budgets are wrapped into trade programmes, which contain additional – albeit unmeasured – incentives

• Commercial and shopper teams have little or no experience commissioning ROI analytics

When shopper marketing campaigns are analysed, they are often shown to deliver very low return-on-investment (ROI). This is particularly true in comparison with media and promotional campaigns. Shopper marketing typically delivers an ROI of 20p for every £1 invested, meaning that 80p is lost per £1 spent.

There are a number of reasons why shopper marketing campaigns deliver such poor ROI.

Some of the channels available are notoriously poor, delivering at best an ROI below 10p for each £1 invested. This includes channels such as advertising boards at the end of a trolley, trolley bays, car park ads and security shrouds. In general, the further locations are from the actual fixture where the product is shelved, the less effective they are at triggering purchase.

Shopper marketing campaigns that are not analysed can never be optimised. Since many shopper tools and techniques deliver such low levels of ROI and most are never analysed, much of the annual £500m spend is effectively eroding profit for brands. But it doesn’t have to be this way.  It is possible to help the commercial and shopper teams understand which channels work best and which don’t work at all; which should be prioritised, and which should be removed from the shopper marketing schedule altogether.

Ebiquity suggests using high-definition test vs control analytics. In a given retailer’s estate, stores can be allocated to a test cell (where specific shopper activity is taking place) and others into the control cell (where it is not). The control cell can then be refined via optimisation techniques to ensure it is well-matched to the test cell – as such, the control set becomes a DNA twin of the test set. This approach allows us to measure the incremental impact of different shopper activities with confidence (due to incredibly low error margins).

Many retailers offer manufacturers and brands a package of different in-store channels for their shopper marketing programmes: for instance, some point of sale plus trolley bays, floor stickers, and hanging flags. But because it is possible to understand in granular detail which channels work and which don’t, commercial teams who invest in shopper ROI analytics are able to have informed negotiations with their retail partners about shopper marketing.

Empowered with this intelligence, they can say: “I have this amount of money to spend, but I want to spend it here and here, and not there and there. This will be a win:win for both of us because it will drive topline sales and deliver better ROI, which we both want.”

Please login or register to add a comment.

Contribute Now!

Loving our articles? Do you have an insightful post that you want to shout about? Well, you've come to the right place! We are always looking for fresh Doughnuts to be a part of our community.

Popular Articles

See all
10 Digital Marketing Trends for 2019 you Should Know

10 Digital Marketing Trends for 2019 you Should Know

As digital trends evolve every year, marketers should always be aware of the changes in order to easily adapt with emerging technologies and stay ahead in the market. This will help them gain a competitive edge and...

Georges Fallah
Georges Fallah 27 December 2018
Read more
7 reasons why social media marketing is important for your business

7 reasons why social media marketing is important for your business

Social media is quickly becoming one of the most important aspects of digital marketing, which provides incredible benefits that help reach millions of customers worldwide. And if you are not applying this profitable...

Sharron Nelson
Sharron Nelson 6 February 2018
Read more
Top 10 B2B Platforms to Help your Business Grow Worldwide

Top 10 B2B Platforms to Help your Business Grow Worldwide

Although the trend of a Business to Business portal is not new but the evolution of technology has indeed changed the way they function. Additional digital trading features and branding has taken the place of...

Salman Sharif
Salman Sharif 7 July 2017
Read more
Digital Marketing Vs. Traditional Marketing: Which One Is Better?

Digital Marketing Vs. Traditional Marketing: Which One Is Better?

What's the difference between digital marketing and traditional marketing, and why does it matter? The answers may surprise you.

Julie Cave
Julie Cave 14 July 2016
Read more
Collection Of The Best Email Testing Tools Online

Collection Of The Best Email Testing Tools Online

Don’t be afraid of email testing. There are many free or freemium tools online that can help you with testing your SPAM score, deliverability and even the rendering of your email. We feature 30 email testing tools in...

Roland Pokornyik
Roland Pokornyik 31 October 2016
Read more